7 Simple Tips to get your Invoices Paid on Time
Collecting payments is a constant struggle for all sized businesses across the globe. A U.S. Bank Study found that around 82% of small business failures are mainly due to inadequate cash management.
Generally small businesses have very little in cash reserves and therefore it is highly important that invoices are paid on time so that they can fulfill orders as well as operate consistently.
So, in this blog I am going to share a few simple tips for getting your invoices paid on time.
Always do your homework properly
For reducing the chances of taking on a dodgy new client, it is important for you to run a check on the organization’s credit history, including directors’ past bankruptcies as well as insolvencies. This can be done online with tools such as Equifax’s Business Credit Express. Also, it is worthwhile using the Australian Business Register’s ABN Lookup tool for confirming the business is a registered legal entity. If you are still not sure, you can conduct an ASIC search for checking whether there are existing charges against the organization or whether it is in liquidation.
Don’t forget to set clear & non-negotiable due dates
Always remember that communication is key. Before you engage with a client, you should have an open as well as transparent dialogue with them. While setting a due date, never use invoicing terms such as “upon-receipt” or give them a number of days i.e. “due in 10 days, 30 days, etc…”. Rather, give them a physical date. That way, there is no room for misinterpretation or confusion.
Also, while setting the date, you should make sure that it is clearly discussed as well as agreeable to your client. If you want, you can also include late penalties. That way, if they fail to pay on time, you will be compensated for it.
Always make the invoice & payment process more convenient
If you make it easy for your clients to receive as well as pay their invoice, they will definitely pay it on time. You can use an online invoice solution as well as easy payment tools so that your clients can receive the invoice as well as pay from their mobile device. Also, you can offer more types of payment methods.
You should find out what they want to use & add that payment method.
Try sending your invoice as early as possible
You should try sending your invoice as early as possible as your best chance of getting paid is just after you have finished the job, when the work is still top-of-mind with the customer. If you delay, you may risk falling down the customer’s priority list.
Always organise your records
You should always try to maintain detailed records of each project & all reconciliations for avoiding any confusion around what invoices are paid, what is outstanding as well as what is missing. Also accurate history of your invoices, notices as well as reminders will help you settle potential disputes down the track.
Promptly follow up on overdue invoices
Overdue invoices need to be followed up instantly. Initially you need to send reminders & then make phone calls. It is true that no one likes to make these types of calls. However, they are highly important if you want to get paid as early as possible.
Lastly, do an excellent job
Ultimately, you need to put customer service first as well as try to exceed their expectations. Remember, quality customer relationships as well as great work will positively influence the speedy payment of invoices.
When your customers do pay you promptly, don’t forget to thank them for their business.
These simple steps can maximise your chances of getting paid on time and with on time payments from your customers, you will be able to use all that extra, tension-free time to take your business to a new level.